Michael Burry doubles down on bearish AI, tech bets; shorts Tesla, Nvidia and chip stocks

Register FREE

Investor Michael Burry, best known for predicting the 2008 housing market crash, has expanded his bearish bets against several AI-linked stocks, including Tesla, Nvidia, Applied Materials and Caterpillar, while renewing his wager against semiconductor stocks, Business Insider reported.

Burry said he rolled over his bearish position on the iShares Semiconductor ETF (SOXX), replacing put options expiring in January 2027 with new contracts maturing in March 2027, the report said citing a Substack post of June 30. The new options carry higher strike prices in the low-to-mid $400 range, compared with the low-to-mid $300s previously.

The SOXX ETF, which tracks major chipmakers including Micron, AMD, Nvidia, Broadcom, Intel and Applied Materials, has surged from around $160 in April last year to about $640, driven by investor optimism over the artificial intelligence boom.

Burry argued that semiconductor valuations have become excessively stretched, sharing a chart showing the Philadelphia Semiconductor Index trading at its widest premium to its 200-day moving average since the dot-com bubble, the report said.

“The SOXX itself is a pure form of overvaluation in an index,” Burry wrote, adding that such extremes are rarely seen.

Besides maintaining bearish positions against the Nasdaq-100 through QQQ put options, Burry said he has also shorted Tesla, Caterpillar, Nvidia and Applied Materials.

Commenting on Tesla, whose shares have climbed about 22% since April, Burry said he was “happy it jumped back to this level.”

He also revealed that this was his first bearish bet against Caterpillar, despite previously profiting from owning the stock. “I am a bit shocked I am short CAT but this is just not anywhere near supported by the actual business,” he wrote.

Caterpillar shares have rallied 86% in the first half of the year and 167% over the past 12 months, buoyed by expectations that the company will benefit from rising investment in AI infrastructure.

According to the report, Burry also dismissed the latest rally in semiconductor stocks, saying spending plans announced by Samsung and SK Hynix would only push already “parabolic” semiconductor equipment stocks even higher. He added that industry contacts were sceptical about current valuations.

The investor said his bearish exposure has increased in recent weeks, although he continues to keep individual short positions relatively small.

Burry, who shifted from managing a hedge fund to publishing his investment views on Substack last year, has repeatedly warned that the AI boom has fuelled a speculative bubble and argued that technology companies are overspending on advanced chips that could become obsolete quickly.